GoTyme Bank cautious on growth as war continues

GOTYME BANK Corp. could take a more prudent stance as the prolonged conflict in the Middle East continues to stoke volatility.

“I think what we would do if [rates] stayed higher for longer and the credit quality deteriorated across the market [is] we would simply grow slower. So, that would be our… financial protection,” GoTyme Bank President and Chief Executive Officer Nathaniel C. Clarke said in an interview on Money Talks with Cathy Yang on One News on Thursday.

He said their margins could benefit as the Bangko Sentral ng Pilipinas (BSP) tightens its stance anew amid growing inflation risks due to the war.

“The majority of our balance sheet is in low-risk treasuries, so we’re actually going to see those interest rates come up [and] our income statement will actually improve. But I think we’re more worried about, in the mid- to long-term, what does it mean for the economy if the war lasts for another year? But because we are very short-dated in our lending, we actually have very little exposure to risk,” he added.

GoTyme Bank is “cautiously optimistic” about customer growth amid weakening macroeconomic prospects, he said, even as the shock could offer opportunities.

“I think we’re cautiously optimistic with our customer base so far. We’re not seeing, for example, customers dipping abnormally in the savings growth to the top line. And adoption is actually still accelerating. I think for us, in our high-growth phase, that growth can sometimes mask some of the underlying macro issues,” Mr. Clarke said.

“It’s not an exact comparison, but when we went through the early COVID shock in South Africa, we actually saw more momentum in the business because digital banks inherently offer better pricing, better value, lower fees. So, adoption of digital banking actually accelerates.”

He added that they are on track to reach 10 million customers in the coming weeks and 12 million by yearend as they onboard some 300,000 customers monthly.

Mr. Clarke also said their target market continues to be those that are “previously banked” as the low cost of operating a digital bank allows them to offer significantly more competitive rates and fees that could attract these individuals to transact with them.

“We strongly believe that digital banks in the Philippines and actually in most economies around the world, 10 years from now, are going to be the largest and most profitable retail banks. And the reason for that is a few structural shifts in the economy and consumer behavior,” he said.

“The only significant advantage incumbent banks have now is trust. And that’s why I say 10 years, because it’ll take a while.”

GoTyme Bank booked a net loss of P2.95 billion in 2024, narrowing from the P3.44-billion loss in 2024 as it saw strong credit growth. Mr. Clarke earlier said he expects the bank to become profitable by mid-2027. — Aaron Michael C. Sy